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REPUBLICOF THE PHILIPPINESDepartment of the Interior and Local Government

Department of Budget and Management

Joint Memorandum Circular No. 2011-1Date: Ap r j 1 1 ~ r 2011

ALL PROVINCIAL GOVERNORS, CITY AND MUNICIPALMAYORS, PRESIDING OFFICERS AND MEMBERS OF THESANGGUNIANS, PUNONG BARANGAYS AND ALL OTHERSCONCERNED ~

AMENDING DILG-DBM JOINT MEMORANDUM CIRCULAR NO.1, DATED SEPTEMBER 20, 2005, ENTITLED, "GUIDELINESON THE APPROPRIATION AND UTILIZATION OF THE 20%OF THE ANNUAL INTERNAL REVENUE ALLOTMENT FORDEVELOPMENT PROJECTS" AND DILG MEMORANDUMCIRCULAR NO. 2010-138 DATED DECEMBER' 2, 2010,ENTITLED" USE OF THE 20% COMPONENT OF THE ANNUALINTERNAL REVENUE ALLOTMENT SHARES"

1.0 PURPOSES

1.1

1.2

1.3

2.0

To provideguidelineson the appropriationand utilizationof no less thantwenty percent (20%) of the Internal Revenue Allotment (IRA) fordevelopment projects.

To enhance transparency and accountability of local government units inundertaking development projects.

To include projects in addressing and responding to natural and man-made disasters and calamities.

GENERAL POLICIES

2.1

2.2

2.3

In aq::ordance with Section 287 of the LocalGovernment Code, every LGUshall appropriate in its annual budget no less than twenty percent (20%)of its annual internal revenue allotment for development projects.

It may be utilized to finance the priority development projects andprograms, as embodied in the duly approved local development plan thatdirectly support the PhilippineDevelopment Plan, th~ Medium-TermPublicInvestment Program and the Annual Investment Program. .

All projects to be funded shall contribute to the attainment of desirablesocio-economic development and environmental management outcomesand shall partake the nature of investment or capital expenditures.

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3.0 PROJECTS COVERED

The 20% of the IRA intended for development projects may be utilized for thefollowing priority programsand projects:

3.1 Social Development

3.1.1 Construction or rehabilitation of health centers, rural health unitsor hospitals,and purchaseof medicalequipment;

3.1.2 Construction or rehabilitation of local government-owned potablewater supply system;

3.1.3 Establishment or rehabilitation of Manpower Development Centers;

3.1.4 Constructionor rehabilitation of evacuationcenters;

3.1.5 Purchaseor repair of area-wide calamity related alarm or warningsystem;

3.1.6 Rehabilitationof cultural/historical sites;

3.1.7 Purchase or repair of appropriate calamity-related rescue operationsequipment such as inflatable boats, breathing apparatus, extractiontools, safe line rescue ropes, fire extinguishers, chainsaws, two (2)way handheld radios and the like;

3.1.8 Purchase and development of land for the relocation of informalsettlers and relocation of victims of calamities;

3.1.9 Construction or rehabilitation of facilities such as multi-purpose hallintended to cater out-of-school youths, women, senior citizens,minors, displaced families, indigenous people and differently-abledpersons;and

3.1.10 Installation and maintenance of street lighting system exceptpayment of electric bills.

3.2 Economic Development

32.1 Construction or rehabilitation of communal irrigation or waterimpounding system and purchaseof post harvest facilities such asfarm or hand tractor with trailer, thresher and mechanicaldriers;

3.2.2 Constructionor rehabilitation of local roads or bridges and purchaseof appropriate engineering equipment such as dump trucks, gradersand pay loaders;

3.2.3 Capitalexpenditures related to the implementation of livelihood orentrepreneurship/localeconomicdevelopment projects; and

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3.2.4 Amortization of loans used to finance development projects cited inthis Joint Circular, subject to the 20% debt servicecap.

3.3 Environmental Management

3.3.1 Reforestationand urban greening;

3.3.2 Construction or rehabilitation of sanitary landfills, material recoveryfacilities and purchaseof garbage trucks and related equipment;

3.3.3 Implementation of flood and erosion control projects such asrehabilitation and construction of drainage systems, de-silting ofrivers, de-clogging of canals; and

3.3.4 Other environmental management projects that promote air andwater quality, as well as productivity of the coastal or freshwaterhabitat, agricultural land and forest land.

4.0 EXPENDITURE ITEMS NOT COVERED

The following expense items that are not related to and/or not connected withthe implementation of development projects, programs and activities shall not bepaid out of the 20% development fund:

4.1 Administrative expenses such as cash gifts, bonuses, food allowance,medical assistance, uniforms, supplies, meetings, communication, waterand light, petroleum products and the like;

4.2 Salaries, wages or overtime pay;

4.3 Travelling expenses, whether domestic or foreign;

4.4 Registration or participation fees in training, seminars, conferences orconventions;

4.5 Construction, repair or refinishing of administrative offices;

4.6 Purchase of administrative office' furniture, fixtures, equipment orappliances;and

4.7 Purchase, maintenance or repair of motor vehicles or motor cycles.

5.0 RESPONSIBIL TV OF THE LOCAL CHIEF EXECUTIVE

It is the responsibilityof every ProvinCialGovernor, City and Municipal Mayor andpunong Barangayto ensure that the 20% of the IRA is optimally utilized to helpachieve desirable socio-economicdevelopment and environmental outcomes. Theappropriations for development projects shall not include items for personalservices and those mentioned in the immediately preceding Item No.4 hereof.Further, all concerned local chief executives are hereby reminded that utilizing

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such fund, whether willfully or through negligence,for any purpose beyondthoseexpressly prescribed by law or public policy shall be subject to the sanctionsprovided under the LocalGovernmentCodeand under such other applicablelaws.

6.0 SUBMISSION OF THE ANNUAL INVESTMENT PROGRAM (AlP)

Provinces, Cities and Municipalities shall furnish DlLG, thru its Regional Officescopies of the Annual Investment Program (AlP) containing the projects to befunded out of the 20% DevelopmentFund.

7.0 MONITORING.~

The DlLG, through its Bureau of Local Governmenf Supervision (BLGS), shallreview the utilization of the 20% of the IRA through the Local GovernmentPerformanceManagementSystem (LGPMS)and maintain database system on the20% DevelopmentFund.

8.0 REPEALING CLAUSE

All existing issuancesissued either by the Department of the Interior and LocalGovernment (DlLG) or the Department of Budget and Management(DBM), whichare inconsistent herewith, are hereby superseded. Any future reference withrespect to issuancesof both the DBMand the DlLG in relation to the utilization ofthe 20% component of the IRA shall be made in reference to this JointMemorandumCircular.

9.0 EFFECTIVITY

This Joint Memorandum Circular shall take effect immediately.

tc~--~FLORENCIO B. ABAD

Secreta ryDepartment of Budget and Management

JE~REDOSecretary

Department of the Interior and LocalGovernment

Republic cUhe Philippines.DEPARTMENT OF THE INTERIOI\

ANO LOCAL G,1VERNMENT

IN REPLYING, PLS CITE:

SILG11-003510

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